What Can I Claim as a Business Tax Deduction in Australia? The 2026 Guide
This is one of the most Googled tax questions in Australia.
Over 4,000 business owners search it every month. The answer is not complicated. But a lot of money gets left on the table because people are not sure what qualifies.
Here is a plain-English guide to business tax deductions in 2026.
The Basic Rule
You can claim a deduction for any expense that is directly related to earning your business income.
The expense must be real. It must be for the business, not personal use. And you must have a record to back it up.
That is the core test. Everything else flows from it.
What You Can Claim
Here are the most common deductible business expenses:
Wages and super. Everything you pay your staff wages, super, payroll tax, and workers compensation premiums is deductible.
Rent and utilities. Office rent, electricity, internet, and phone costs used for business purposes are all deductible.
Professional services. Accounting, bookkeeping, legal advice, and payroll services are fully deductible.
Marketing and advertising. Website costs, Google Ads, social media ads, and printed materials are deductible.
Equipment and tools. Business equipment is deductible, either immediately under the instant asset write-off or over time as a depreciating asset.
Vehicle expenses. Business-related vehicle costs can be claimed. You need a logbook or valid records to support the business-use portion.
Training and education. Courses, conferences, and training directly related to your current business are deductible.
Bank fees and interest. Fees on your business bank account and interest on business loans are deductible.
Insurance. Business insurance premiums public liability, professional indemnity, and workers compensation are all deductible.
The $20,000 Instant Asset Write-Off
This is one of the most valuable deductions for small businesses right now.
If your business has a turnover under $10 million, you can immediately deduct the full cost of eligible assets up to $20,000.
This means equipment, tools, computers, and machinery bought before 30 June 2026 can be written off immediately rather than over several years.
The deadline is 30 June 2026. If you are planning a purchase, do it this week.
What You Cannot Claim
Some expenses look deductible but are not. These are the most common mistakes.
Personal expenses. Groceries, personal clothing, family holidays, and private health insurance are not deductible. Even if paid through the business account.
Entertainment. Taking clients to dinner or a sporting event is generally not deductible. There are very limited exceptions under FBT rules.
Traffic fines and penalties. ATO penalties and parking fines cannot be claimed.
Drawings and owner’s salary in a sole trader structure. If you are a sole trader, what you pay yourself is not a deductible wage. It is part of your business profit.
Record Keeping: The Part Most Businesses Get Wrong
The ATO does not take your word for it.
Every deduction you claim needs a receipt or record. The ATO requires you to keep records for five years.
This means bank statements, receipts, invoices, logbooks, and contracts. Digital copies are acceptable. A shoebox of crumpled receipts is not ideal but it is better than no records at all.
Home Office Deductions
If you work from home, you may be able to claim a portion of your home running costs.
The ATO offers a fixed rate method. For 2025–26, the rate is 70 cents per hour worked from home. You need a record of the hours worked a diary or timesheet is acceptable.
You cannot claim mortgage repayments or council rates unless you have a dedicated home office space.
Frequently Asked Questions
Can I claim my phone as a business deduction? Yes, the business-use portion. If you use your phone 60% for business, you can claim 60% of the cost.
Can I claim meals while travelling for business? Yes, if you are travelling overnight for work. Day trips for meals generally are not deductible.
Can I claim my home internet? The business-use portion is deductible. Keep records of how you calculated the percentage.
What if I am not sure whether something is deductible? Ask your bookkeeper or accountant before claiming. Getting it wrong can cost more than the deduction was worth.
Let Edulink Keep Your Records Clean and Your Claims Correct
Missed deductions cost your business money. Wrong claims cost even more when the ATO questions them.
At Edulink Payroll Services, we help small and medium businesses across Sydney and Campbelltown keep clean records and stay compliant all year round.
Edulink Payroll Services charges $750 per year, per employee covering payroll, STP reporting, and compliance.
Have more employees? Call us for a discounted rate.
📞 Call us today: 04 044 71 816
Edulink Payroll Services | Campbelltown & Greater Sydney | Call 04 044 71 816
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